| April 29, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | I am in Richmond, KY this morning in the lobby of a Hilton Tru hotel editing this newsletter before I continue my trip to Asheville, NC for the Options Conference. My wife Cheryl is along and we are going to pick up Robby at the airport. Robby, USA version, will be our videographer for the 17 interviews we have set up for the two-day conference.
Intercontinental Exchange, Inc. (ICE) announced that as of April 24, 2024, it has achieved a record open interest (OI) of over 94 million contracts across its futures and options markets, representing a 26% increase year-over-year. This includes a record 66.3 million contracts in commodities and a 62 million contract record in energy, marking a 30% increase in the latter. The surge in open interest was particularly notable in ICE's global oil markets and Brent options, with the latter reaching a new high of 3.5 million contracts on the same day, a 51% jump from the previous year. Additionally, ICE's Low Sulphur Gasoil options and global natural gas markets also hit record open interests, with notable increases in ICE's Henry Hub and TTF natural gas futures. The overall growth in ICE's environmental complex open interest by 43% since the start of the year underlines the robust price signals and liquidity essential for companies transitioning to alternative energy sources. ~JJL
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| | | | | | Lead Stories | | | Inflation-wary US rate options market cautiously prices for 2024 Fed hike
Gertrude Chavez-Dreyfuss - Reuters
Options on Secured Overnight Financing Rate (SOFR) futures are showing a higher probability that the Federal Reserve could hike interest rates a quarter percentage point this year and next as U.S. inflation and the labor market remain resilient.
Bond investors look to SOFR futures, among other indicators, to gauge expectations on Fed policy rates. Options, on the other hand, are widely used to hedge against expected moves, with "vol" or volatility a key input in the price.
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Indian Bourse's Shares Tank as $20 Million Sought in Option Fees; Regulator SEBI has sought higher fees for derivative contracts; BSE shares tank as much as 19%, biggest slump since 2017 debut
Ashutosh Joshi - Bloomberg
Shares of BSE Ltd. plunged as much as 19% on Monday, their biggest intraday decline on record, after India's markets regulator requested it pay back-pay fees charged on derivatives contracts. The Securities and Exchange Board of India has asked BSE, the country's second biggest exchange operator after privately-held National Stock Exchange of India Ltd., to pay as much as $20 million in fees. The additional charges are being calculated on the notional turnover of derivative contracts instead of the value of the premium paid against such wagers, according an exchange filing.
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Fed Rate Doubts Have Options Traders Covering Both Hikes and Cuts; Bond traders hedging against tail risks of higher, lower rates
Edward Bolingbroke - Bloomberg
Treasury options traders are protecting against everything from multiple interest-rate cuts this year to a hike ahead of the US Federal Reserve meeting this week.
Recent inflation data has remained stronger than had been expected, dimming expectations that the central bank will cut rates any time soon. While short positions in Treasury futures extended last week as yields pushed through fresh yearly highs, options flow has suggested growing uncertainty around the path of the Fed's monetary policy for this year, with a number of deep out-the-money tail-risk hedges appearing across a number of tenors.
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MicroStrategy's Saylor Reaps a Stock Windfall During Bitcoin's Record Run; Bitcoin proxy has outperformed the cryptocurrency this year; The firm is 'a retail magical belief stock,' Campbell says
Olga Kharif and Tom Contiliano - Bloomberg
Michael Saylor's decision back in 2020 to start buying Bitcoin has paid off in spades this year for the co-founder and executive chairman of MicroStrategy Inc. Saylor has garnered an estimated $400 million or so from pre-planned daily sales of about 5,000 shares of the enterprise software company from January through last week, based on data compiled by Bloomberg. The share sales follow the exercising of options awarded in 2014 that were set to expire. The stock has doubled this year to around $1,280, surpassing the record-setting gains of the original cryptocurrency during the same period. At the end of 2014, MicroStrategy was trading at around $160.
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Bernstein says slowing Bitcoin ETF flows are a 'short-term pause,' maintains $150,000 price target
James Hunt - The Block
Analysts at research and brokerage firm Bernstein aren't worried about the slowing spot bitcoin exchange-traded fund flows, expecting the trend to be a "short-term pause" before bitcoin resumes its bull run toward their $150,000 target by the end of 2025.
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Bitcoin ETF Bandwagon Heads to Australia After $53 Billion Haul in US; Australia's top exchange expected to approve the ETFs in 2024; Self-managed pension assets could flow into the new products
Richard Henderson - Bloomberg
Australia is set for a wave of Bitcoin exchange-traded fund launches, following in the footsteps of the US and Hong Kong, as issuers like Van Eck Associates Corp. and BetaShares Holdings Pty line up for listings. ASX Ltd., which handles around four-fifths of the country's equity trading, is expected to approve the first spot-Bitcoin ETFs for the main board before the end of 2024, according to people familiar with the matter, who asked not to be identified as the information is private.
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Hedge funds retreat from oil as war risk fades
John Kemp - Reuters
Investors sold oil at the fastest rate for more than six months amid signs that Israel and Iran have chosen not to escalate their conflict, ensuring the rally in crude prices stalled well before reaching $100 per barrel.
Hedge funds and other money managers sold the equivalent of 95 million barrels in the six most important petroleum futures and options contracts over the seven days ending on April 23.
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| | | | | | Exchanges | | | ICE Reports Record Open Interest of Over 94 Million Contracts across Futures and Options including Record Open Interest in Energy and Commodities
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today announced that its global futures and options markets reached record open interest (OI) of over 94 million contracts on April 24, 2024, up 26% year-over-year (y/y), including record OI in commodities of 66.3 million and record energy OI of 62 million, with energy up 30% (y/y). "ICE has been focused on building a global commodities and energy trading platform for over two decades, designed to serve the needs of an evolving commercial customer base," said Trabue Bland, SVP, Futures Exchanges at ICE. "The record depths of liquidity truly highlight the benefit our clients are finding in the contracts we provide, that allow for both flexibility and precision hedging across our benchmark derivatives products."
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| | | | | | Regulation & Enforcement | | | Supreme Court Rejects Musk's 'Twitter Sitter' Appeal in SEC Win
Greg Stohr - Bloomberg
The US Supreme Court rejected an appeal from Elon Musk in his "Twitter sitter" case, leaving intact his agreement with the Securities and Exchange Commission to have an in-house lawyer pre-approve his social media posts about Tesla Inc. The justices, without comment, refused to hear contentions from the Tesla chief executive officer that the accord he signed in 2018 now violates his constitutional free speech rights.
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Franklin Templeton lists Ethereum ETF on DTCC; The DTCC listing does not guarantee SEC approval of Franklin's spot Ether ETF application.
CoinTelegraph
Asset management firm Franklin Templeton has listed its spot Ether exchange-traded fund (ETF) â the Franklin Ethereum TR Ethereum ETF (EZET) â on the Depository Trust and Clearing Corporation (DTCC) website, a significant platform for securities transactions in the United States. The DTCC website's "Create/Redeem" column lists the ETF, indicating its availability for creation and redemption. The listing of the Franklin Templeton Ethereum spot ETF on the DTCC website does not mean Franklin's spot Ether ETF application to the United States Securities and Exchange Commission (SEC) will be approved.
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US Supreme Court won't hear Elon Musk dispute over SEC settlement
John Kruzel - Reuters
The U.S. Supreme Court declined on Monday to hear Elon Musk's bid to throw out part of a securities fraud settlement with the Securities and Exchange Commission restricting the billionaire businessman's public statements about his electric car company Tesla.
The justices turned away Musk's appeal of a lower court's decision upholding the 2018 settlement reached after he said on social media that he had "funding secured" to take Tesla private - a statement the SEC in a legal action called false and misleading.
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| | | | | | Strategy | | | Tesla
Cboe (Video)
In #Vol411, Joel Hawthorne @louiswinthrop covers Friday's #trading activity, today's most active index & equity options and what data to be on the look out for this week.
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| | | | | | Miscellaneous | | | Jane Street is big. Like, really, really big
Robin Wigglesworth - Financial Times
As Jane Street's lawsuit against Millennium and two former employees shows, Wall Street's most profitable trading machine isn't keen on letting its secrets slip out.
However, it has begun in recent years to supplement its capital with some debt, and lenders expect at least some disclosure. Thanks to MainFT's Eric Platt, Alphaville has now got its mitts on the prospectus for its latest bond sale.
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